Jan 28, 2026
Jacob called into The Ramsey Show for advice on his unusual living arrangement (1). The 21-year-old had been living with his now-ex-girlfriend and her parents for nine months after they broke up. He and his ex shared a tiny home on her parents’ land.
During the call, Jacob explained he had $2,900 left on a car loan, around $1,000 in credit card debt and he had recently started a full-time job paying $35 an hour. With roughly $4,000 in savings, he said he’s finally ready to move out and start fresh.
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Dave Ramsey told him it was “super weird” the parents let Jacob to stay that long and urged him to get out for his own sake. Jacob then said he was looking at a rent-to-own house and wondered whether it was a good way to enter the housing market and start building equity. Ramsey didn’t hesitate.
“You don’t need rent-to-own — you need non-homelessness,” he said. “You don’t build exciting from desperation, you build it from boring.”
Ramsey’s point was simple: When someone is trying to sort out their life and clean up their finances, they don’t need a complicated real estate contract on top of it — especially one that sounds too good to be true.
Rent-to-own homes
While Jacon’s situation was unusual, the question he asked is a familiar one. With home prices so high and down payments hard to save up, maybe a rent-to-own scenario could offer a shortcut to homeownership. On the surface it sounds appealing: Rent a home now, buy it later and build equity along the way.
But here’s the catch — rent to own doesn’t work the same way it does in real estate TV shows. Unlike a traditional mortgage, rent-to-own deals are private agreements between the tenant and the seller, and that means there’s no standard contract, no national rules and very little protection if something goes wrong. That’s why consumer lawyers often tell people to slow down and read the fine print, especially if they’re being sold “homeownership without the bank.”
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Hard market
Even though Jacob’s situation is unusual, the challenge he’s facing is familiar for a lot of young adults. Moving out to live independently isn't easy anymore — even if you make a decent income.
Across Canada, monthly rent amounts have climbed faster than wages in many cities, making it much harder for first-time renters to find affordable places to live. According to Rentals.ca and Urbanation, the average asking rent for a one-bedroom apartment in Canada reached $1,920 a month as of December 2023, up roughly 12% year-over-year, and up dramatically since before the pandemic (2).
In major cities like Vancouver and Toronto, one-bedroom apartments can run well over $2,300 to $2,500 monthly, putting enormous pressure on people just starting out (3).
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If someone earns a strong hourly wage, a single-bedroom rental can still swallow a large portion of take-home pay. Housing experts often recommend keeping housing costs under 30% of net income, but many Canadians — especially younger renters — routinely pay far more than that today (4). That leaves less money for groceries, transportation, loan payments and savings.
On top of these pressures, the caller was still carrying a few thousand dollars of debt. While he now has the income to pay it off, he still needs to juggle stable housing, basic living costs and debt payment without getting overwhelmed.
Once he builds that foundation, he’ll be in a much better position to work toward bigger goals, including homeownership. And while it may feel “boring,” choosing a simple rental gives you time to build savings, improve your credit score and prepare for the responsibilities that are associated with a mortgage. There’s no benefit in rushing into a risky situation before you’re ready.
Bottom line
There’s nothing glamorous about renting a small apartment, paying your bills on time and slowly building up savings. But in Canada's tough housing market, that boring foundation often beats risky shortcuts like rent-to-own agreements.
If your goal for the future is to buy your own home, focus first on stable housing, manageable expenses, a healthy emergency fund and a clean credit file. Once those pieces are in place, the big milestones get much easier to reach.
— with files from Melanie Huddart
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Youtube (1); Rentals.ca (2); Government of Canada (3)
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Jessica Wong is a freelance writer based in Toronto, Ontario. Her work has appeared in numerous publications including STAY Magazine: Hotel Intelligence and re:porter magazine. With a background in economic development, entrepreneurship and small business consulting, she enjoys writing about topics that help Canadians learn more about personal finance.
